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Verizon Communications (VZ) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Verizon Communications (VZ) closed at $57.59 in the latest trading session, marking a +0.7% move from the prior day. This change outpaced the S&P 500's 0.02% gain on the day. At the same time, the Dow added 0.1%, and the tech-heavy Nasdaq gained 0.17%.

Prior to today's trading, shares of the largest U.S. cellphone carrier had lost 0.75% over the past month. This has lagged the Computer and Technology sector's gain of 6.42% and the S&P 500's gain of 4.82% in that time.

Wall Street will be looking for positivity from VZ as it approaches its next earnings report date. This is expected to be August 1, 2019. The company is expected to report EPS of $1.20, unchanged from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $32.41 billion, up 0.63% from the prior-year quarter.

VZ's full-year Zacks Consensus Estimates are calling for earnings of $4.75 per share and revenue of $131.84 billion. These results would represent year-over-year changes of +0.85% and +0.74%, respectively.

Investors might also notice recent changes to analyst estimates for VZ. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.03% higher. VZ is currently a Zacks Rank #3 (Hold).

Investors should also note VZ's current valuation metrics, including its Forward P/E ratio of 12.04. This represents a discount compared to its industry's average Forward P/E of 15.91.

It is also worth noting that VZ currently has a PEG ratio of 2.84. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Wireless National stocks are, on average, holding a PEG ratio of 2.1 based on yesterday's closing prices.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 111, which puts it in the top 44% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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